Kroger closes out 2022 fiscal year on a strong note

The Kroger Co. topped the high end of Wall Street’s earnings-per-share projections for its 2022 fourth quarter and fiscal year as it turned in solid sales growth for both periods.

For the fourth quarter ended Jan. 28, net sales totaled $34.82 billion, up 5.4% from $33.05 billion a year earlier, when the top line rose 7.5%, Cincinnati-based Kroger said Thursday. Excluding fuel, sales gained 5.9% year over year. Identical sales without fuel climbed 6.2% in Q4 and were up 10.2% on a two-year stack, the company reported.

Overall fiscal 2022 net sales came in at $148.26 billion, up 7.5% from $137.89 billion in fiscal 2021, which saw 4.1% growth. Backing out gasoline sales, Kroger’s 2022 sales edged up 5.2%. Identical sales excluding fuel increased 5.6% and were up 5.8% over two years.

Kroger noted that identical sales without fuel would have grown 6.7% in Q4 and 5.8% for the full year excluding the termination of its agreement with pharmacy benefit manager Express Scripts effective Dec. 31.

“Kroger achieved exceptional results in 2022 as we executed on our ‘Leading with Fresh and Accelerating with Digital’ strategy, building on record years in 2020 and 2021,” Kroger Chairman and CEO Rodney McMullen said in a statement.

“Providing affordable food is even more essential at a time when inflation is affecting so many of our customers’ lives. We do this by delivering fresh products at a great value, trusted Our Brands items and personalized promotions,” McMullen added. “Our proven go-to-market strategy enables Kroger to successfully navigate many operating environments. We believe that by delivering value for our customers, investing in our associates and serving our communities, Kroger will continue to achieve attractive and sustainable total returns for our shareholders.”

At the bottom line, Kroger posted fiscal 2022 fourth-quarter net income (attributable to the company) of $450 million, or 62 cents per diluted share, compared with $566 million, or 75 cents per diluted share, a year ago. For the full year, net earnings (attributable to Kroger) came in at $2.24 billion, or $3.06 per diluted share, versus $1.66 billion, or $2.17 per diluted share, in fiscal 2021.

On an adjusted basis, Kroger recorded net income of $724 million, or 99 cents per diluted share, for the fourth quarter and $3.1 billion, or $4.23 per diluted share, for fiscal 2022, compared with fiscal 2021 adjusted results of $686 million (91 cents diluted EPS) in the fourth quarter and $2.8 billion ($3.68 diluted EPS) for the full year.

Analysts, on average, had forecast Kroger’s fiscal 2022 fourth-quarter adjusted EPS at 89 cents, with estimates running from 84 cents to 95 cents, according to Refinitiv. The full-year consensus projection was for adjusted EPS of $4.15, with a range of $4.09 to $4.21.

In its fiscal 2023 outlook, Kroger projects adjusted EPS (diluted) of $4.45 to $4.60 (including an estimated per-share benefit of 15 cents for a 53rd week) and 1% to 2% growth in identical sales excluding fuel (2.5% to 3.5% underlying growth adjusted for impact of Express Scripts). Analysts estimate Kroger’s 2023 adjusted EPS at $4.20 on average, with estimates ranging from $3.63 to $4.52, according to Refinitiv.

*Editor’s Note: Please check back at winsightgrocerybusiness.com for more coverage of Kroger’s fiscal 2022 results.